Choice Canada plans 100 hotels in five years

LAS VEGAS, NV—Close to 6,000 Choice hotel owners and managers, including a couple hundred from Canada, invaded the Mandalay Bay Hotel in Las Vegas to attend the annual Choice International convention May 6-8, 2008. The convention included educational seminars and brand sessions for Choice International’s 10 hotel brands. And it also included entertainment. Cirque de Soleil acrobats performed to Beatles tunes, noted author Deepak Chopra was the motivational speaker, and comedian Rita Rudner and The Temptations rounded out the gala dinner. 

But the highlight for many was the Beach Boys concert held Wednesday night on the Mandalay Bay Beach.  Even non-fans enjoyed what Beach Boy Brian Wilson called “the best location ever for a Beach Boys concert”, as participants took off their shoes, waded into the water in front of the stage, batted beach balls around and sang along with the music.

Great year for Canada
Canadians at the conference could meet at the Canadian booth at the trade show, and attended a special Canada Business Session and reception on Wednesday evening before the Beach Boys concert.

This format was a change from previous years when there was an extra day of meetings for the Canadians.  “We listened to our franchisees,” Brian Leon, Choice Hotels Canada’s managing director, franchise growth and administration told CLN in an interview. Franchisees said it was difficult to be away from their properties for the extra day, and that they would prefer to have expanded fall meetings in Canada.

At the Canada Business Session, Leon said that 2007 was an exceptional year for Choice Hotels in Canada.  “Occupancy showed a little flattening, but overall we had good, solid trends.  The strongest performance was in Western Canada, where we went up one per cent, from 62 to 63 per cent occupancy.  We also had a growth of 3.7 per cent in RevPar, following 4.7 per cent in 2006 and 4.6 per cent in 2005.
 
“We added 15,000 largely new-built rooms, which might explain why there was a loss of momentum in occupancy.  On the positive side, the actual demand for rooms is not increasing as fast as supply, so there are still good opportunities out there.
ADR was up to $93.06, a 4 per cent increase over last year.

Leon noted that travellers are discovering they can enjoy as much comfort as they need by trading down from a deluxe hotel.  “We’re in a good place for that shifting trend,” he said.  “It’s driving demand for free Internet and breakfast—which are not cheap!”

Tim Oldfield, Choice Hotels Canada’s managing director franchise performance, noted that reservations from the Choicehotels.ca website had increased dramatically.

He outlined a sales and marketing approach that uses the mass-market approach along with below-the-line targetted relationship marketing.  The latter involves sending out communication pieces to engage people with the brand, e-mailing to reach a lot more people because the cost is lower, and work on the public relations side.

Choice Hotels Canada’s summer marketing promotion differs from the $50 gas rebate promo used in the U.S.

“We decided to make a big noise with a big media buy — Win Your Stay,” said Oldfield. Information packets go out to franchisees this month. “The promotion is larger than usual – we want to capture more guests this summer,” said Oldfield.

Last year, Choice Hotels Canada gave franchise operations an overhaul, with a targetted service approach, to make sure help with quality assurance inspections and training was there where and when franchisees wanted.

Unprecedented year

The hotel industry in Canada had an unprecedented year with $4.7 billion in overall transaction volume, including the Legacy deal.  The price per room has made a tremendous progression. Once the large, strategic deals are netted out, the average is now $77,000 to $97,000 per room.

The Colliers Hotel Value Index makes an ‘apples to apples’ comparison of values.  In 2006, value rose 12.2 per cent; in 2007 it rose 12.7 per cent and in 2008 it is expected to rise 11.1 per cent.  This means that a hotel that cost $6 million in 2005 would sell for $8.4 million in 2008.

Poised for growth

Choice Hotels Canada is poised for growth.  Last year, in its best year ever, the company made $450 million in gross revenue. Eighteen new hotels are under development – 10 of them new builds, “a bit of a shift for us” said Leon.  “We  have a good broad portfolio of hotels across the country.

Oldfield said one of Choice Hotels Canada’s six key strategic thrusts, is expansion to 375 properties over the next five years. That means 100 hotels, or 20 properties per year. 
“We plan to proactively target specific brands, markets and site opportunities.  We want our franchisees to stay but we will get aggressive with properties who don’t meet expectations.  And we want to increase the rate of new build to 40 per cent, compared to our tradition of 20 per cent,” said Oldfield.

2007 Gold Awards
Choice Hotels had three finalists for Hotel of the Year. This award is based largely on housekeeping scores as well as LTR (likely to recommend) scores.
The hotels are:

o    Quality Resort Bayside, Parksville, BC—Ross Borland, GM;
o    Comfort Inn & Suites, Barrie, ON —Jessica Myerscough, GM; and.
o    Comfort Inn & Suites, Saint-Jerome, QC—Manon Leclerc, GM.

The Comfort Inn & Suites in Barrie won Hotel of the Year.

Two of these hotels, the Comfort Inn & Suites in Barrie and the Quality hotel in Parksville, BC were finalists for the International award this year.

Marilyn Alexander, general manager, Comfort Inn Pembroke, ON was honoured by the Women’s Business Alliance of Choice Hotels on May 7, 2008, as the first time recipient of the Woman of the Year award.